Termination instructions for real estate loans
Many consumers have benefited in the past from false revocation policies for their real estate loans. Pre-examination of notice of termination for real estate loans Does the cancellation policy of my loan agreement not correspond to the reality? Are the dates for concluding my loan agreement falling within this timeframe? What should I do if I receive a wrong cancellation policy? Written note: Real estate loan agreements can usually only be terminated within 14 days after conclusion of the contract.
This right of revocation is to be pointed out to the consumer by the revocation instruction. In the absence or incorrectness of this instruction – eg due to misleading phrasing – a different period applies.
Many consumers have benefited from this in the past: Many financial institutions had made small or large mistakes in the preparation of the cancellation policy. Consequently, the 14-day withdrawal period was dropped. On the contrary, consumers could use their right of withdrawal for an indefinite period of time after signing the contract. In 2016, however, the insurer intervened and in most cases set a grace period for the consumer. The credit agreements that could previously be revoked indefinitely could only be revoked until 31 December 2016.
In the event of missing or incorrect cancellation policy, the following provisions now apply: The agreements concluded between December 31, 2010 and December 31, 2016 may be terminated indefinitely if there is no or incorrect instruction. Orders placed after 31 December 2016 may be terminated with no or no false instruction for a maximum of 1 year and 14 days.
Revocation of real estate loans with several borrowers
The Federal Court of Justice (BGH) decides on the consumer’s right to object to real estate loans and does not stop. By decision of 11 October 2016 – II ZR 482/15 at the end of last year, the Federal Court of Justice (BGH) has taken a position on key issues of the right of opposition. In the dispute of 11 October 2016, two borrowers (plaintiffs) had closed several real estate loan agreements with the 2004 plaintiff house bank.
She had enclosed the credit agreements with the revocation instructions she had used at that time. In 2012, the lawsuits sought to sell the property to be financed. The Respondent has offered the Applicants a dissolution agreement in which the Applicants have agreed to pay a termination fee. The cancellation agreement has been concluded. Thus, in October 2013, the applicants withdrew their contractual statements on the conclusion of the credit agreements in 2004.
In the application, the applicants have asked the defendant to reimburse the cancellation fee plus default interest and to return the services of the principal bank. Among other things, the BGH had to clarify whether only one borrower could revoke his contractual declarations with several borrowers and what consequences this would have for the loan agreements.
In addition, the BGH had to examine whether the early voluntary termination of the loan agreements as a result of the cancellation agreement in 2012 led to the borrowers losing their right of withdrawal. The decision-making grounds of the Federal Court of Justice contain both findings in favor of the complainants and in favor of the principal bank. At that time, BuyNer had not implemented the requirements of the model termination statement correctly.
Therefore, according to the Federal Court of Justice, the cancellation policy was wrong, so that the revocation period in 2013 had not yet expired. In addition, the BGH has specified that each of several borrowers can independently repudiate its contractual statements to conclude a consumer credit agreement.
The consequence of such a revocation would be that the consumer loan agreement as a whole would be converted into a repayment obligation, ie the credit agreement would have to be dissolved in relation to the other borrowers. Other peculiarities of the proceedings were that the plaintiff parties declared the opposition only after they had concluded the objection agreement with the house bank in 2012 with a protest fee.
In this context, the BGH stated that the complainants can in principle still effectively withdraw their order statements from the year 2004, even after such termination agreement. However, the BGH clarified that, in its opinion, in such a case the applicant’s right of opposition could have expired and thus be irrelevant to the company.
Following the conclusion of the contract, which had been concluded at the request of the complainants, BuyNer could be protected and trusted that the complainants would no longer exercise their right of withdrawal. The BGH referred the case to the previous instance, which has to examine in detail the problem of the forfeiture of the opposition.
The Federal Court of Justice has affirmed by a resolution of 21.02.2017 – 16 ZR 381/16 that a cancellation policy is to be interpreted according to general factual aspects and that it is not important for the review of the regularity of the cancellation policy, as the contracting parties understand the cancellation policy. Of particular concern are the rulings of the Federal Court of Justice for Borrowers who have already announced the withdrawal of their contractual statements on the conclusion of a loan agreement and have since come into conflict with their credit company over the validity of that withdrawal.
These assessments help both borrowers and credit institutions to argue. These may be used to settle at least some of the pending litigation relating to the right of withdrawal.